Abstract
Indonesia and the European Union are currently negotiating the Indonesia-European Union Comprehensive Economic Partnership Agreement (I-EU CEPA) on Government Procurement Chapter which aims to open market access based on the principle of non-discrimination. However, the principle of non-discrimination proposed by the European Union has different provisions from the regulation on the use of domestic products in Indonesia because the use of domestic products is required in the government procurement and is discriminatory against foreign products and suppliers. This study aims to explain whether these different arrangements will eliminate the obligation to use domestic products in Indonesia if the I-EU CEPA is agreed. The results of this study indicate that if the principle of non-discrimination of the I-EU CEPA on Government Procurement Chapter is agreed, it will not immediately eliminate the obligation to use domestic products in Indonesia because the principle of non-discrimination only applies to covered procurement. Indonesia can implement transitional measures while still enforcing regulations on the use of domestic products in the government procurement by giving time after entry into force as an adjustment effort in order to increase the competitiveness of domestic products against foreign products and the threshold permitted for foreign suppliers. Keywords: Market Access, Non-discrimination Principle, I-EU CEPA, Domestic Products, Government Procurement DOI: 10.7176/JLPG/118-11 Publication date: February 28 th 2022
Highlights
Government Procurement – procurement of goods, construction work, consultancy services and other services required by the government are an important aspect in international trade and an important part for the government of a country in carrying out various public activities
1 This is because the procurement market itself is around 10-15% of the Gross Domestic Product (GDP) globally and is important because it is seen from the benefits obtained by both domestic and foreign stakeholders in increasing transparency, integrity and competition.[2]
This provision is a form of discrimination that is prohibited in the draft I-EU Comprehensive Economic Partnership Agreement (CEPA) on Government Procurement Chapter and the WTO GPA Revised
Summary
Government Procurement – procurement of goods, construction work, consultancy services and other services required by the government are an important aspect in international trade and an important part for the government of a country in carrying out various public activities. Law Number 3 of 2014 regarding Industry has different arrangements with the principle of nondiscrimination, especially in articles 86, 87 and 88 along with the implementing regulations that regulate the obligation to use domestic products in the government procurement implemented by state institutions and special treatment in the form of price preference to domestic suppliers This provision is a form of discrimination that is prohibited in the draft I-EU CEPA on Government Procurement Chapter and the WTO GPA Revised. Legal harmonization www.iiste.org only aims to find uniformity or common ground for the fundamental principles of the various existing legal systems (which will be harmonized).[1] Related to these differences in regulation, there are legal implications for the non-discrimination principle of the I-EU CEPA on Government Procurement Chapter if applied in Indonesian national law, especially regarding regulations for the use of domestic products in Indonesia. Vietnam's strategy with the European Union on the Vietnam-EU CEPA is as follows:
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